Allan, I keep eyeballing your chart of the Nikkei225… It looks like some time in the first half of 1992, when the index was near 20000, it broke what could to be a neckline of a Head and Shoulders. It appears that Nikkei continued after that in a nearly free fall, with maybe one serious interruption, and without a convincing re-test of the neckline. It bottomed later that year, near 15000, at the origin of your pink lower channel line.
I searched for a more detailed chart of the period, but haven’t found one. Would be interesting to examine up close the bursting of the Japanese bubble.
It is hard to tell how much credence one can put into such historical analogies. But then, on the other hand, it would make sense that collapses of great bubbles would have similarities in psychology, as they happen in different markets and at different times.
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As I was ready to post, I see that Onischka published his update on the (current) Nikkei. Interesting triple bottom forming on the “Wochenchart”
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edit: I see that Bobcor beat me on the subject with his interesting and detailed post. |
